15 Jul 2020

It is not unusual for private landlords and letting agents to advertise properties to let stating that they will not accept applications from people who rely on Housing Benefit (HB) or the housing element of Universal Credit to pay their rent. Despite the Department of Social Security not having existed since 2001, the phrase used in adverts is usually “No DSS”. 

This has raised the question of whether such restrictions amount to unlawful discrimination. 

Although unlikely to amount to direct discrimination, as income and employment status are not protected characteristics under the Equality Act 2010, it has long been argued that it could amount to indirect discrimination in some cases.

A ‘landmark’ case July 2020

In what is being described as a ‘landmark’ case, District Judge Victoria Elizabeth Mark sitting in York County Court, considered the case of a disabled single parent who had an application for private rented housing refused by a letting agent based on her receipt of Housing Benefit. In a judgment reported on 14 July 2020, she held that the letting agent was in breach of the Equality Act 2010.

Reacting to the judgment, Chris Norris, policy director for the National Residential Landlords Association (NRLA) reportedly said:

No landlord should discriminate against tenants because they are in receipt of benefits. Every tenant’s circumstance is different and so they should be treated on a case by case basis based on their ability to sustain a tenancy.

Why are landlords reluctant to let to benefit claimants?

Historically, landlords were reluctant to let to HB claimants because of delays in processing applications. Since April 2008, a key factor influencing landlords has been the introduction of the Local Housing Allowance (LHA) and the requirement that this, except in certain specified circumstances, is paid to claimants rather than landlords. 

Restrictions on the level of LHA paid to claimants were introduced by the Coalition Government in April 2011 – these changes led various housing bodies, including representative bodies of private landlords, to argue that HB claimants were being priced out of the market.

Further restrictions were introduced; for example, LHA rates were frozen with effect from April 2016 for four years. This added to landlords’ concerns about the gap between LHA and market rent levels. 

Evidence of disparities between actual rent levels and LHA rates payable which were submitted to the Communities and Local Government Select Committee’s inquiry into homelessness over 2016-17 led the Committee to recommend that “Local Housing Allowances levels should also be reviewed so that they more closely reflect market rents.” 

At the start of the fourth year of the benefit freeze (2019/20) analysis by Shelter noted that the 2019/20 LHA rates for a two-bedroom home did not cover the full rent charged in 97% of Broad Market Rental Areas in England.

Other factors cited as reasons for landlords’ reluctance to let to HB claimants include:

  • uncertainly around the roll-out and implications of Universal Credit;
  • the payment of Housing Benefit in arrears;
  • restrictions in mortgage agreements and insurance requirements;
  • perceptions of benefit claimants as more likely to demonstrate anti-social behaviour;

and

  • tax changes resulting in landlords focusing on “less risky” tenants.

The extent of the issue

There is no definitive information on the extent to which landlords have refused to let to benefit claimants. Reported survey evidence has suggested an increase in the practice in recent years.

Given the increase in Universal Credit claims arising from the coronavirus (Covid-19) outbreak, in June 2020 Shelter raised the potential implications of “No DSS” blanket bans for tenants:

The issue had attracted an increased level of attention in recent years. On 21 February 2019 the Work and Pensions Select Committee launched an inquiry into No DSS: discrimination against benefit claimants in the housing sector – the inquiry had not concluded before the dissolution of Parliament for the 2019 General Election. On

1 March 2019 the then Minister, Heather Wheeler, said the Government was calling for “the end of housing advertisements which specify ‘No DSS’ tenants.”

Is it actually unlawful to refuse to let to Housing Benefit claimants?

According to  the then Minister for Housing and Homelessness, Heather Wheeler in April 2018, “There is no legislation that prevents private rented sector landlords and agents choosing not to let their property to an individual claiming (a) housing benefit or (b) universal credit. However, the Equalities Act 2010 exists to prohibit acts of discrimination against individuals in terms of age, disability, gender reassignment, race, religion or belief, sex, sexual orientation, marriage and civil partnership and pregnancy and maternity.

While the York County Court case may have settled the position on blanket bans applied by landlords/agencies in relation to benefit claimants seeking private rented housing, affordability checks applied to applicants’ individual circumstances may still be carried out. (Of course being only a County Court judgement it does create a legal precedent).

Click this link to download the FULL Government Report:  Can private landlords refuse to let to Housing Benefit claimants?

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